ESR Seeks $1.45 Billion in Year’s Second-Biggest H.K. IPO

(Bloomberg) -- ESR Cayman Ltd., a logistics real estate developer, is seeking to raise as much as HK$11.4 billion ($1.45 billion) in what could be Hong Kong’s second-biggest initial public offering this year.

The company and some shareholders including Warburg Pincus and Goldman Sachs Investments Holdings (Asia) Ltd. are offering 653.7 million shares at HK$16.20 to HK$17.40 apiece, according to terms of the deal obtained by Bloomberg. ESR in June postponed its IPO attempt of raising as much as $1.24 billion, citing unfavorable market conditions.

ESR’s offering attracted Ontario Municipal Employees Retirement System as a cornerstone investor, with the Canadian pension fund agreeing to subscribe for a total of about $585 million of stock, based on mid-point pricing, the terms show.

The comeback of ESR would further propel Hong Kong’s IPO market momentum even as anti-government protests continue to rock the city. The developer’s share sale would trail Budweiser Brewing Company APAC Ltd.’s $5.8 billion IPO last month, according to data compiled by Bloomberg. The city’s first-time share sales have slumped by 43% to $18.4 billion so far this year from the same period last year, the data shows.

The rapid growth of e-commerce in Asia Pacific, fueled by local players such as Alibaba Group Holding Ltd., has boosted demand for logistics warehouse systems. ESR is raising capital as it continues to expand in the region. It bought a majority stake in Singapore’s Sabana Investment Partners Pte. after pledging to invest more than $1 billion in a logistics park in Yokohama, Japan.

APG Asset Management, General Electric Pension Trust and JD.com Inc.’s Jingdong Logistics Group Co. are also among the seven holders selling shares in the IPO.

ESR aims to price the offering on Oct. 25 before beginning trading on Nov. 1, the terms show. Deutsche Bank AG and CLSA Ltd. are joint sponsors for the offering.

©2019 Bloomberg L.P.

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